Types of Bitcoin Moving Averages

There are 4 types of bitcoin trading moving averages:

Simple bitcoin trading Moving Average
Exponential bitcoin trading Moving Average
Smoothed bitcoin trading Moving Average
Linear weighted bitcoin trading Moving Average

The difference between these 4 bitcoin trading moving averages is the weight assigned in to the most recent bitcoin price data.

Simple Moving Average

BTCUSD Simple Moving Average indicator applies equal weight to the bitcoin trading data used to calculate the simple moving average and is calculated by summing & adding up the bitcoin price periods of a chart and this value is then divided by the number of such price periods. For example bitcoin trading simple moving average 10, adds the bitcoin price data for the last 10 bitcoin price periods and divides them by 10.

Exponential Moving Average

Bitcoin Exponential Moving Average indicator applies more weight to the most recent bitcoin price data and is calculated by assigning the latest bitcoin price values more weight based on a percent P, multiplier that's used to multiply & assign more weight to the latest bitcoin price data.

Linear Weighted Moving Average

Bitcoin Linear Weighted Moving Average indicator moving averages applies more weight to the most recent bitcoin price data and the latest data is of more value than earlier bitcoin price data. Linear Weighted bitcoin trading moving average is calculated by multiplying each of the bitcoin trading closing btcusd prices within the series, by a certain weight coefficient.

Smoothed Moving Average

Bitcoin SMMA Indicator is calculated by applying a smoothing factor of N, the smoothing out factor is composed of N smoothing for N bitcoin price periods.

The cryptocurrency chart example shown below shows Simple Moving Average, Exponential Moving Average and Linear Weighted MA. The SMMA bitcoin moving average is not commonly used so it is not shown below.

The Linear Weighted Moving Average cryptocurrency indicator reacts fastest to bitcoin price data, followed by the Exponential MA & then the SMA.

SMA, Linear Weighted Moving Average, Exponential Moving Average - Types of Bitcoin Moving Averages

SMA, Linear Weighted MA, Exponential Moving Average - Types of Bitcoin MAs Moving Averages - Simple Moving Average, Exponential Moving Average(MA) and LWMA

Intraday Trading Bitcoin with Exponential and Simple Moving Averages

The Simple Moving Average and Exponential Moving Average moving averages are the most often used Moving averages to trade bitcoin. Whereas the Exponential Moving Average bitcoin trading moving average has got a more sophisticated method and formula of calculation, its more popular than the Simple Moving Average bitcoin trading Moving Average.

Simple Moving Average is the arithmetic mean of the closing bitcoin trading prices in the bitcoin price period based on the set time period where each time period is added and then it is divided by the number of time bitcoin price periods chosen. If 10 is the bitcoin price period used the bitcoin price for the last ten bitcoin price periods added up then it's divided by 10.

SMA cryptocurrency indicator is the result of a simple arithmetic mean average. Very simple & some Bitcoin traders tend to associate with the bitcoin trend since it closely follows bitcoin price action.

EMA on the other hand uses an acceleration factor and it is more responsive to the cryptocurrency trend.

The Simple Moving Average bitcoin trading moving average is used in cryptocurrency charts to analyze bitcoin price action. If the bitcoin price action in more than 3 or 4 time bitcoin price periods the Simple Moving Average then it's an indication that long cryptocurrency trade positions should be closed immediately & the bullish momentum of buy bitcoin trade is waning.

The shorter the Simple Moving Average bitcoin price period the faster it is to respond to bitcoin price change. Simple Moving Average cryptocurrency indicator can be used to illustrate direct info regarding the bitcoin trend of the btcusd trading market and the momentum by looking at its slope, the steeper or more pronounced slope of the Simple MA is, the stronger the Bitcoin trend.

The Exponential Moving Average is also used by many bitcoin traders in the same way but it reacts faster to the btcusd trading market moves and hence it is more preferred by some cryptocurrency traders.

The Simple Moving Average and Exponential Moving Average can also be used to generate entry and exit points when bitcoin trading. These Moving averages can also be combined with Fibonacci and ADX indicators to generate confirmation the cryptocurrency signals generated by these moving averages.

Get More Lessons and Tutorials & Guides: